Masterplast - In healthcare we trust

Masterplast announced yesterday that it will start another project in Hungary. The value of the project will be HUF 2.6 bln, financed by 80% subsidy of the HU state under the title Investment subsidy for the production of products relevant to COVID19. The new capacity aims to provide medical suits, foot bags, head protection and isolation sheets.
 The expected labor employment will be 40 people and production could start as early as 2021 September.
 According to company expectations, the EBITDA margin of the new products and sales could reach 30% and EUR 22 mln gradually.
 The value of the project based on the Co. and our assumptions could yield as much as HUF 931 (excluding the 15% liquidity discount) to shareholders, but Masterplast already partially included the project in its figures, though we do not know how much contribution the Co expected previously. We have incorporated roughly 50% of the project value as an addition to our TP but we have not included in our earnings forecast yet. As we emphasized before, execution is key in both earnings and consequently in the share price as well.
 We lift our TP to HUF 3,540 and maintain our Buy recommendation.